How much can you really borrow with a mortgage? It might surprise you

20th August 2019

Couple looking at laptop

Some mortgages are more tempting than others.

Barclays, for example, hit the headlines in June 2019 with a change to one of its ranges allowing first-time buyers to borrow £500,000 with no deposit. (1)

While a family member has to contribute 10% of the purchase price from their own savings, it still seems a great opportunity.

But could you really afford it?

Knowing how much you can borrow is crucial when making plans to buy your new home.

The myth of mortgage calculators

How Much Can You Really Borrow With A Mortgage?

When trying to work out how much you could borrow, a general rule of thumb would be 4.75 times your annual income.

However, there are other things that lenders consider, such as your monthly expenses, your credit history and the size of your deposit.

There are plenty of online mortgage calculators that tell how much you could borrow and what your monthly repayments might be.

But these tools aren’t as useful as they might seem. Not only are they limited to the information you provide, they don’t take into account changing interest rates.

Choose your lender wisely

You might not realise, but the amount you can borrow also depends on which lender you choose.

In fact, Which? found that the difference between how much lenders are willing to let you borrow can vary by as much as £22,500. (2)

To decide how much you can borrow, lenders perform an ‘affordability assessment’ based on your income and outgoings.

Often these criteria are different from lender to lender, which helps to explain why the amounts offered can vary.

Talk to the experts

Mortgage comparison sites offer some idea of what’s available, but these don’t always give you the best rates or the latest deals.

So it’s a good idea to get some advice to make sure you get the right mortgage deal to suit your circumstances.

It’s worth speaking to a mortgage broker to see the wood from the trees. We consider deals from around 90 different lenders, some of which aren’t available on the high street.

“It’s always tempting for buyers to use online mortgage calculators to work out how much they can borrow,” said Joe Gaytten, a Trussle Mortgage Adviser.

“But these don’t always reveal the true picture, and if you speak to an adviser you may get a more accurate idea of your borrowing capacity.”


1 - Barclays

2 - Which?

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